If History Is Any Guide, Microsoft Will Fall After Earnings Too

Microsoft reports earnings today and despite an average EPS Beat Rate of 73% and an average Revenue Beat Rate of 68%, Microsoft (MSFT) historically declines 67% of the time in the last calendar week of January over the last five years, losing an average of .86%.

This is a more substantial drop than either the market or the tech sector as a whole—the Nasdaq is actually historically positive 66% of the time over the same period.


Photo: Seasonal Odds

When the following calendar week is also taken into account, Microsoft is even more of an outlier relative to the market as a whole, declining 60% of the time even though the Nasdaq is positive 80% of the time over the same period. In fact, the last week of January and the first week of February combine to produce a very significant average historical return of 3.73%, while Microsoft averages a negative return over the same period.

Seasonal Odds is a live-updating stock market Almanac and real-time back-testing engine developed at Harvard and MIT. It was created by Daniel Nadler (PhD Candidate, Harvard) and Pete Kruskall (S.B. and M.Eng., MIT).

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